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Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Viking Line ABP’s (HEL:VIK1V) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Was VIK1V’s weak performance lately a part of a long-term decline?
VIK1V’s trailing twelve-month earnings (from 31 March 2019) of €6.1m has declined by -19% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -36%, indicating the rate at which VIK1V is growing has slowed down. What could be happening here? Well, let’s look at what’s occurring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Viking Line ABP has fallen short of achieving a 20% return on equity (ROE), recording 2.8% instead. Furthermore, its return on assets (ROA) of 1.2% is below the FI Hospitality industry of 5.4%, indicating Viking Line ABP’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Viking Line ABP’s debt level, has declined over the past 3 years from 5.9% to 2.3%.
What does this mean?
Though Viking Line ABP’s past data is helpful, it is only one aspect of my investment thesis. Generally companies that experience a prolonged period of decline in earnings are undergoing some sort of reinvestment phase with the aim of keeping up with the latest industry growth and disruption. I recommend you continue to research Viking Line ABP to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for VIK1V’s future growth? Take a look at our free research report of analyst consensus for VIK1V’s outlook.
- Financial Health: Are VIK1V’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.